Document of
The World Bank
OFFICIAL USE ONLY
Report No: 72121-RO
RESTRUCTURING PAPER
ON A
PROPOSED PROJECT RESTRUCTURING
OF
MODERNIZING AGRICULTURAL KNOWLEDGE AND
INFORMATION SYSTEMS (P086949)
LOAN 4758 RO
NOVEMBER 16, 2004
IN THE INITIAL AMOUNT OF
41.40 MILLION EURO
(US$ 49.85 MILLION EQUIVALENT)
AND
A RESTRUCTURED AMOUNT OF
30.40 MILLION EURO
(US$ 38.07 MILLION EQUIVALENT)
TO
ROMANIA
FEBRUARY 9, 2016
Sustainable Development Department
Central Europe and Baltic Countries Department
Europe and Central Asia Region
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without
World Bank authorization.
ABBREVIATIONS AND ACRONYMS
APIA
BIP(s)
CAP
EC
EU
EUR
GPS
IACS
MAKIS
MARD
MPF
NRI(s)
PDO
PMU
RISSA
RON
Agricultural Paying and Intervention Agency
Border Inspection Post(s)
(EU) Common Agricultural Policy
European Commission
European Union
Euro (currency)
Global Positioning System
Integrated Administration and Control System
Modernizing Agricultural Knowledge and Information Systems
Ministry of Agriculture and Rural Development
Ministry of Public Finance
National Research Institute(s)
Project Development Objective
Project Management Unit
Research Institute for Soil Science and Agro-chemistry
Romanian Lei (currency)
Regional Vice President:
Country Director:
Sector Manager / Director:
Task Team Leader:
Philippe H. Le Houerou
Peter C. Harrold
Dina Umali-Deininger / Laszlo Lovei
Gabriel Ioniţă
ROMANIA
Modernizing Agricultural Knowledge and Information Systems Project
P086949
CONTENTS
Page
A. SUMMARY ........................................................................................................................... 1
B. PROJECT STATUS ............................................................................................................. 1
C. PROPOSED CHANGES ...................................................................................................... 2
ANNEX 1: RESULTS FRAMEWORK AND MONITORING ................................................. 5
Restructuring
Status: Draft
Restructuring Type: Level two
Last modified on date : 08/29/2012
1. Basic Information
Project ID & Name
P086949: MOD AGR KNOWLEDGE & INFORM SYST
(MAKIS)
Romania
Gabriel Ionita
Dina Umali-Deininger
Peter C. Harrold
11/16/2004
09/30/2010
09/25/2012
03/25/2013
B-Partial Assessment
B-Partial Assessment-Partial Assessment
07/05/2004
Country
Task Team Leader
Sector Manager/Director
Country Director
Original Board Approval Date
Original Closing Date:
Current Closing Date
Proposed Closing Date [if applicable]
EA Category
Revised EA Category
EA Completion Date
Revised EA Completion Date
2. Revised Financing Plan (US$m)
Source
BORR
IBRD
Total
Original
22.02
50.00
72.02
Revised
15.27
40.60
55.87
3. Borrower
Organization
Ministry of Public Finance
Department
Location
Romania
4. Implementing Agency
Organization
Ministry of Agriculture and Rural
Development
Department
Project Management Unit
i
Location
Romania
5. Disbursement Estimates (US$m)
Actual amount disbursed as of 08/29/2012
Fiscal Year
2012
2013
29.89
Annual
Cumulative
0.00
6.91
Total
29.89
36.80
36.80
6. Policy Exceptions and Safeguard Policies
Does the restructured project require any exceptions to Bank policies?
N
Does the restructured project trigger any new safeguard policies? If yes, please select from
the checklist below and update ISDS accordingly before submitting the package.
N
7a. Project Development Objectives/Outcomes
Current Project Development Objectives/Outcomes
To help Romania comply with the agricultural acquis communautaire and to help the agro-food sector take
advantage of the benefits and opportunities arising from EU membership.
7b. Revised Project Development Objectives/Outcomes [if applicable]
ii
Modernizing Agricultural Knowledge and Information Systems Project
RESTRUCTURING PAPER
A. SUMMARY
Project restructuring is proposed for the Romania, Modernizing Agricultural Knowledge
and Information Systems Project (MAKIS), Loan no. 4758 RO to (i) drop two activities
from Component 2 and correspondingly, cancel €6.7 million from the loan, (ii) modify one
intermediate results indicator, and (iii) extend the current Closing Date by six months, from
September 25, 2012 to March 25, 2013, resulting in a cumulative extension of 30 months
from the original closing date of September 30, 2010. This would be the third restructuring
of the Project and in line with BP 13.30, seeks RVP approval given the cumulative
extension exceeding 24 months beyond the original closing date.
B. PROJECT STATUS
The Project was approved on November 16, 2004 and became effective on June 24, 2005.
Since February 2009, progress towards achieving the Project Development Objective has
been rated Moderately Satisfactory, and in June 2011, Implementation Progress was
upgraded to Moderately Satisfactory from a rating of Moderately Unsatisfactory. In part,
the Moderately Satisfactory ratings are due to the risk that the original investment program
for rehabilitation of the national institutes for research and development in agriculture
under Component 2 would not be implemented on time. To date, most Project activities
have been completed and in some areas, Project results have exceeded initial expectations.
The Project was restructured two times. The first restructuring (level 1) was conducted in
September 2010 to (i) align the Project Development Objective (PDO) to more precisely
reflect the current post-accession EU integration challenges facing the Borrower; (ii)
discontinue the Food Safety Component 1 (whose unsatisfactory performance was a risk to
achievement of PDOs); (iii) revise Project activities; (iv) revise the Results Framework and
Monitoring; and (v) extend the Project closing date by 12 months to September 30, 2011.
In addition, an amount of €0.8 million was cancelled from the Loan and the Loan amount
became €40.6 million.
The second restructuring (level 2) was conducted in September 2011 to (i) extend the
current Closing Date by about 12 months, from September 30, 2011 to September 25, 2012;
(ii) cancel an amount of €3.5 million from the loan; and (iii) introduce required changes to
project costs and implementation schedule resulting from the restructuring.
The project has progressed since the second extension, albeit at a slower pace than expected
mainly because of the slow decision making process in the Ministry of Agriculture and
Rural Development (MARD) triggered by frequent changes of high-level management
(ministers and deputies). In addition, the continued financial crisis prevented the allocation
of sufficient budget funds to the Project in the first half of 2012, slowing down payments
and thus implementation of ongoing contracts and procurement of new contracts. However,
following budget adjustments, MARD has provided all funds required for completion of the
ongoing contracts.
1
The financial management arrangements are moderately satisfactory because of the
insufficient funds allocated to the project in the first half of 2012. All audits have been
prepared on time, with a clean audit opinion and no internal control issues mentioned.
C. PROPOSED CHANGES

Components
One change is proposed under Component 2 “Support for Agricultural Research”: to drop
the construction of a new insect-proof greenhouse at the National Research and
Development Institute for Potatoes and Sugar Beet (INCDCSZ) after two unsuccessful
attempts to procure the civil works. The other activities supported under Component 2
remain unchanged, and these changes will not prevent the Project from achieving its PDO.

Financing
o Cancellation
As a result of the proposed changes to Component 2 above, it is proposed to cancel €6.7
million from the loan, reducing the total component allocation from €18.97 million to
€12.27. €6,700,000 would be cancelled from Category (5)(b). This change is reflected in
the revised allocation of loan funds by category of expenditure presented below (Table 1).
Table 1 – Revised allocation of Loan by expenditure category
Euro
Category of Expenditure
Current
Revised
(1) Goods
(1) Goods
(a) under Parts A.1,
(a) under Parts A.1,
A.2, A.3, and
A.2, A.3 and
A.5 of the Project
A.5 of the
Project
(b) under Parts A.4,
(b) under Parts A.4,
B.1, C and D of
B.1, C and D of
the Project
the Project
(2) Consultants’
services, including audit
(a) under Parts A.1,
A.2, A.3, and
A.5 of the
Project
(b) under Parts A.4,
B.1, C and D of
the Project
(3) Training
(a) under Parts A.1,
A.2, A.3, and
A.5 of the
Allocation
Current
Revised
254,689
254,689
5,195,000
5,195,000
% of Financing
Current
Revised
100% of
100% of
foreign
foreign
expenditures
expenditures,
, 100% of
100% of local
local
expenditures
expenditures
(ex-factory
(ex-factory
costs) and
costs) and
80% of local
80% of local
expenditures
expenditures
for other
for other
items
items
procured
procured
locally
locally
(2) Consultants’
services, including audit
(a) under Parts A.1,
A.2, A.3 and A.5
of the Project
(b) under Parts A.4,
B.1, C and D of
the Project
(3) Training
(a) under Parts A.1,
A.2, A.3 and A.5
of the Project
2
91,517
91,517
1,335,000
1,335,000
103,630
103,630
85% of
foreign
expenditures;
and 75% of
local
expenditures
85% of
foreign
expenditures
; and 75% of
local
expenditures
100%
100%
Category of Expenditure
Current
Revised
Project
(b) under Parts A.4,
(b) under Parts A.4,
B.1, C and D of
B.1, C and D of
the Project
the Project
(4) Civil Works
(4) Civil Works
(a) under Parts A.1,
(a) under Parts A.1,
A.2, A.3, and
A.2, A.3 and A.5
A.5 of the
of the Project
Project
(b) under Parts A.4,
(b) under Parts A.4,
B.1, C and D of
B.1, C and D of
the Project
the Project
(5) (a) Research
(5) (a) Research
Institute
Institute
Program
Program
Development
Development
under Part B.2
under Part B.2
of the Project
of the Project
(b) Research
(b) Research
Institute
Institute
Program
Program
Implementatio
Implementation
n under Part
under Part B.2
B.2 of the
of the Project
Project
(6) Research Grants
(6) Research Grants
under the
under the
Competitive Grant
Competitive Grant
Scheme under Part
Scheme under Part
B.3 of the Project
B.3 of the Project
(7) Incremental
Operating Costs
Allocation
Current
Revised
7,489,999
2,724,688
0
(a) under Parts A.1,
A.2, A.3 and
A.5 of the
Project
(b) under Parts A.4,
B.1, C and D of
the Project
TOTAL
Cancellation as of July 6, 2012

7,489,999
2,724,688
0
100% of
foreign
expenditures;
and 80% of
local
expenditures
100% of
foreign
expenditures
; and 80% of
local
expenditures
150,000
150,000
85% of
foreign
expenditures;
and 75% of
local
expenditures
13,940,000
7,240,000
80%
80%
3,920,000
3,920,000
49%
49%
(7) Incremental
Operating Costs
(a) under Parts A.1,
A.2, A.3, and
A.5 of the
Project
(b) under Parts A.4,
B.1, C and D of
the Project
% of Financing
Current
Revised
85,477
85,477
1,810,000
1,810,000
37,100,000
30,400,000
6,700,000
85% until
December 31,
2007; 70%
until
December 31,
2009; and
25%
thereafter
85% of
foreign
expenditures
and 75% of
local
expenditures
85% until
December
31, 2007;
70% until
December
31, 2009;
and 25%
thereafter
Closing date
The team proposes an extension of the Closing Date from September 25, 2012 to March 25,
2013 to enable completion of the rehabilitation of the laboratory/institutes buildings under
Component 2. The limited extension would enable the Borrower to complete the
rehabilitation of selected research institutes and procurement of essential IT equipment for
the Agricultural Payment and Intervention Agency (APIA). While these are important to
3
achieving the PDO, more importantly, the server procurement and installation for APIA is a
core element of a reform action plan for the Integrated Administration and Control System
for EU CAP funds, and represents an activity in support of an EC-GOR agreed action plan
towards improving the administration of EU rural funds. This critical procurement was
completed but delivery and installation would not be completed without an extension. At
the same time, given insufficient time to initiate and complete new activities (e.g
procurement of new equipment for the institutes for research and development in
agriculture), despite the proposed closing date extension, the team will remind the
Borrower that the loan will finance only the good and services delivered and accepted, and
works completed before the closing date, while any such deliverables received after the
closing date will remain to be financed by the Borrower.

Implementation schedule
The implementation schedule for rehabilitation of the national laboratories and institutes
under component 2 is proposed to be extended by six months to March 25, 2013. The
Procurement Plan has been revised to fit the new extended implementation schedule.

Results Framework and Monitoring
One modification of the results framework is proposed to be change the final target of the
intermediate results indicator (for component 2) regarding the number of laboratories able
to carry out the required analyses for soils (for compliance with the nitrates and sludge EU
directives) and GMO testing. Because the construction of a new building and procurement
of the required equipment to establish the national reference laboratory for soil testing (to
confirm compliance with the EU directives on nitrates and sludge) at the Research Institute
for Soil Science and Agro-chemistry (RISSA) were dropped from the project, the target
indicator cannot be met. Therefore, only one national reference laboratory (for GMO
testing) will be the target value for this indicator. The indicators dropped at previous
restructuring have been removed from the table.
All other indicators will remain unchanged.
The table of Results Framework and Monitoring is attached as Annex 1.
4
ANNEX 1:
Results Framework and Monitoring
Romania: Modernizing Agricultural Knowledge and Information System Project
Project Development Objective (as revised in October 2010):
PDO Level Results
Indicators*
Increase in agri-food export to
EU 27 relative to Gross Value
Added
Increase in CAP funding
committed to beneficiaries
under EAGF and EAFRD
Core
To help Romania comply with the agricultural acquis communautaire and to help the agro-food sector take advantage of the benefits and opportunities arising from EU membership
D=Dropped
C=Continue
N= New
R=Revised
Cumulative Target Values**
Unit of
Measure
Baseline
Frequency
YR 1/2
YR 3/4
YR 5/6
YR7
Data Source/
Methodology
Responsibility for
Data Collection
Continued
3.6% (200204 avrg)
Year 3:
4.5%
Year 5:
5.0%
Year 7:
5.5%
Annually
EUROSTAT
MARD PMU
Continued
90% of
EAGF
allocation
and 20% of
EAFRD
allocation
…
…
95% of
EAGF
allocation
and 40% of
EAFRD
allocation
Annually
APIA & MARD
records
MARD PMU
INTERMEDIATE RESULTS
Intermediate Result (Component One):
1. Functional network of
ANSVSA's Regional
Laboratories
Continued
(achieved)
2. Functional network of
Border Inspection Points to
monitor food quality and
movement of animals
3. Functional network of phytosanitary National Reference
and Regional Laboratories
-
Year 1: 1
Year 2: 1
Year 3: 2
Year 4: 2
Year 5: 2
Year 6: 2
Year 7: 2
Annually
Annual reports
MARD/ PMU
Continued
(achieved)
Number
of
regional
labs
Number
of BIPs
-
Year 1: 1
Year 2: 2
Year 3: 3
Year 4: 3
Year 5: 3
Year 6: 3
Year 7: 3
Annually
ANSVSA’s
annual report
ANSVSA
Continued
(achieved)
Number
of labs
-
Year 1:
1NR, 1RL
Year 2:
2NR, 2RL
Year 3: 2
NR, 3 RL
Year 4: 2
NR, 3 RL
Year 5: 2
NR, 3 RL
Year 6: 2
NR, 3 RL
Year 7: 2
NR, 3 RL
Intermediate Result (Component Two):
4. Number of research institutes reformed
5. Laboratories (RISSA and NRDIBH) able to carry out the required analyses for soils (compliance with the nitrates and sludge EU directives) and GMO testing
5
6. Development of new technologies compatible with EU standards
Revised Intermediate Result (Component Two):
4. Number of research institutes
reformed
Continued
5. Laboratory (NRDIBH) able
Revised
to carry out the required
target value
analyses for GMO testing
6. Development of new
Continued
technologies compatible with
EU standards:
a) New technologies developed
b) Number of research
contracts
Revised Intermediate Result (Component Three):
Continued
7. Functional training center
able to train the following:
a) trainers,
b) extension staff,
c) food safety inspectors,
d) agro-processors and private
sector,
e) researchers
8. Number of farmers receiving
information / training regarding
EU accession and membership
Continued
Continued
9. Number of multi-media
campaigns
Number
of
institutes
Number
of labs
-
Year 1: 0
Year 2: 2
Year 3: 3
Year 4: 4
Year 5: 4
Year 6: 4
Year 7: 4
Annually
-
Year 1: 1
Year 2: 1
Year 3: 1
Year 4: 1
Year 5: 1
Year 6: 1
Year 7: 1
semi-annual
reports
Year 1:
a) 1; b) 3
Year 3:
a) 10;b) 15
Year 7:
a) 20
b) 40
Year 2:
a) 5; b) 8
Year 4:
a) 12;b) 20
Year 5:
a) 15;
b) 30
Year 6:
a) 20
b) 40
Year 1:
a) 30
b) 300
c) 50
d) 100
e) 30
Year 3:
a) 30
b) 1260
c) 200
d) 1350
e) 90
Year 5:
a) 30
b) 1860
c) 350
d) 1750
e) 150
Year 7:
a) 30
b) 2160
c) 400
d) 2050
e) 180
Year 2:
a) 30
b) 960
c) 125
d) 500
e) 60
Year 1:
3,000
Year 4:
a) 30
b) 1560
c) 275
d) 1350
e) 120
Year 3:
15,000
Year 6:
a) 30
b) 2160
c) 400
d) 2050
e) 180
27,000
33,000
Year 2:
9,000
Year1: 1
Year 2: 2
Year 4:
21,000
Year 3: 2
Year 4: 2
2
2
Number
of
technolo
gies
Number
of
trainees
-
Number
of
beneficia
ries
-
Number
of
campaig
ns
-
6
Annual reports
from NRI and
external reviews
NRDIBH
MARD / PMU
semi-annually /
annually
Reports from
TICs and
ANSVSA
TIC / PMU
Annually
PMU Reports
based on agristatistics
MARD/PMU
MARD / PMU
Continued
-
-
-
-
a) 300 staff
trained
b) 100 GPS
procured
for the
LPIS unit
c) GAP
analysis for
reprogram
ming of
LPIS
performed
Year 1: S
Year 2:
MS
Year 3: MS
Year 4:
MU
Year 5:
MU
Year 6:
MS
Year 7: S
10. EU Compliant IACS
Intermediate Result (Component Four):
11. Bank supervision ratings
Revised Intermediate Result (Component Four):
11. Bank supervision ratings
Continued
(actual for
years 1 to 6)
7
Reports from
APIA
MARD